Ask a College Advisor: Is the FAFSA Based on Parents’ Income?

Question: Is the FAFSA based on your parents' or guardians' income?

Answer: Although your parents' or guardians' income can influence your financial aid offer when filling out the Free Application for Federal Student Aid (FAFSA), the application also factors in a lot of other information. What else might you need? Let's see what information is required to fill out the FAFSA.

Financial Information

If you're a dependent student, the FAFSA will attempt to measure your family's financial strength to determine your expected family contribution. Therefore, your family's taxed and untaxed income, assets, and benefits (such as funds collected through unemployment or Social Security) should be entered into the FAFSA.

Taxed income can consist of self-employment income or W-2 income. Untaxed income includes child support received, interest income, and veteran's noneducation benefits. Assets may include cash; checking and savings balances; investments such as stocks, bonds, and real estate (do not include the home you live in); and business and farm assets.

Financial Documentation

Ensure you provide relevant federal tax information or tax returns, including IRS W-2 information. Eligible tax returns include the IRS 1040; the foreign tax return or IRS 1040NR; and the tax returns for Puerto Rico, Guam, American Samoa, the U.S. Virgin Islands, the Marshall Islands, the Federated States of Micronesia, and Palau. In addition, you need to make sure you have records for your untaxed income, assets, and benefits to complete the FAFSA.

Family Size

Many people are confused when completing information related to their family on the FAFSA. However, the FAFSA has made recent improvements that should make it easier for students to complete their applications. Make sure to follow the instructions on the FAFSA and include your family size and the number of family members who will be attending college or career school during the application year.

Dependent vs. Independent Students

One thing to note is that independent students do not need to include their parents' or guardians' information on the FAFSA. The financial information on the FAFSA for independent students would consist of their financial information, as well as their spouse's information (if applicable). A dependent student's financial information on the FAFSA would consist of their financial information and that of their parents or guardians.

Other Information

You will also need to provide information like your name, date of birth, and current address on the FAFSA. Additionally, your social security number (SSN) will need to be correctly entered on the FAFSA, along with those of your parents or guardians if you are a dependent student. If applicable, include your driver's license number on the FAFSA. You can also include your alien registration number if you are a permanent resident without an SSN.

Changes to the FAFSA

As we all know, many laws and regulations change constantly. The same is true regarding rules and stipulations governing the FAFSA. Therefore, if you're unsure about something, it would be wise to double-check with an official source. If you have any questions regarding the FAFSA, reach out to your college's financial aid office.

Summary

Know what information you'll need to include before filling out the FAFSA. If you are a dependent student, include your and your parents' or guardians' untaxed and taxed income on the FAFSA, along with other information such as their assets and benefits. Independent students shouldn't include anyone else's financial information on the FAFSA, unless they're married. If you have any outstanding questions, reach out to the financial aid office at your school for support.

DISCLAIMER: The responses provided as part of the Ask a College Advisor series are for general informational purposes only. Readers should contact a professional academic, career, or financial advisor before making decisions regarding individual situations.

Feature Image: SDI Productions / E+ / Getty Images